Shorten budget reply looks after battlers

Angus Livingston, AAP Senior Political Writer
Bill Shorten says a future Labor budget will put workers and the middle class ahead of big business

Bill Shorten will outline a financial strategy he says will look after battlers instead of big business when he responds to the federal budget on Thursday.

The Labor leader has a war chest to spend thanks to his proposed changes to negative gearing, dividend imputation and capital gains tax.

"We're going to put working and middle-class people first in our budget reply tomorrow night," Mr Shorten told reporters on Wednesday.

"More funding for hospitals, more funding for schools, more funding for TAFE, not giving away $80 billion in corporate tax cuts."

Mr Shorten will back the coalition's tax cuts for low- and middle-income earners set to come into effect on July 1, but won't back the rest of the proposed changes out to 2024/25, including corporate tax cuts.

He said there was nothing new in the budget to tackle the rising cost of living.

"They were offering millions of taxpayers $5 or $10 yet they're offering the Commonwealth Bank $7.5 million every week."

Treasurer Scott Morrison told Labor the three phases of his seven-year tax plan are one package, despite Labor promising to only support the first stage.

"I'm introducing the whole plan, and it's a test for Labor - do they want taxes to be lower or do they want them to be higher," Mr Morrison said.

The treasurer said he was still committed to reducing the company tax rate to 25 per cent from 30 per cent.

Prime Minister Malcolm Turnbull also played down talk the government will use the budget as an excuse to go to an early election.

Labor has promised to support the tax cuts that start at $200-a-year for those in the lowest bracket, rising to $530-a-year for those earning up to $90,000, from July this year.

But it won't back the coalition's plan to abolish the 37 per cent rate in 2024/25, which will take the cost to $140 billion over 10 years.

An analysis from GetUp suggests $105 billion of that will go back to people earning above the average wage.